Chicago Business Barometer Surprises with Gain

Written by Sandy Williams

The Chicago Business Barometer reached its highest level since December 1983 with a PMI reading of 72.1, according to MNI Indicators. The April PMI rose 5.7 points from March, refuting economists’ expectations of a dip to 65.

Demand was robust in April with the new orders index jumping 9.9 points to a near seven-year high. Production inched up another 0.9 points for the highest level since January 2018. A surge in buying activity due to raw material shortages indicates an anticipated rise in business activity, said MNI, citing anecdotal evidence.

Shortages of parts and raw materials resulted in order backlogs soaring 16.2 points to the highest level since December 1973. Depleted inventories caused the inventory index to plunge 8.7 points into contraction for the first time since December. Delivery times by suppliers remain slow although easing by 3.5 points in April.

Prices paid at the factory gate were at a 41-year high, leaping 11.1 points and indicating increased cost burdens for firms.

Employment was at the highest index reading since August 2018 and gaining 1.7 points for its second successive month of expansion.

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